ZDC is a micro-cap that provides security and surveillance services and is now trading at 32x times' P/E. In the 4Q-FY2023, ZDC’s revenue declined -10% to $5.8M, a surprising decline amid strong results in previous quarters, 1) reduced security guard revenue; and 2) reduced revenue from a two large pipeline construction projects that were completed in the second half of 2023. In addition, in Q4 2023, the Company's revenue at its two Alberta, Canada equipment centers saw reduced revenues due to weather which delayed the start of construction projects. Q4-2023 is also a low point in the utilization rate of 82%, which management indicates rebounded over 90% after year-end, signalling revenue could stabilize in the near term. Overall, we would not be in a hurry to buy here, especially with the illiquidity, we would be more comfortable adding on the up trend as growth resumes. We would wait for a few quarters here.
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